In the chaotic world of Sports Law, there are times when cases fall through the cracks because the controversy does not break into the mainstream media. The two actions that were filed in Washington, D.C. and New York fit into this category of cases. The cases focus on a business practice by major sports card manufacturers Topps and Panini. Specifically, the complaints focus on the redemption cards placed in both companies’ packs.
For those uninitiated in the world of sports card collectibles, it is helpful to provide a background on redemption cards. Normally when someone purchases a pack of sports cards, they are treated with around 12 cards. These cards include a player’s name, team, position, pictures, and sometimes stats. Certain cards range in their rarity, making some more desirable than others.
In contrast, the sight of a redemption card would be striking to one unaware of the practice. The redemption cards are blank white cards that contain a sticker. The sticker identifies the card that you could receive from the manufacturer. It will have the player's information, as well as the series the card is from. To obtain the card from the company, the purchaser must go to the website and redeem the card. The company will ship the card to the redeemer when it becomes available. This practice stems from the inability to obtain certain cards or players' signatures in time for the release of the packs.
In the lawsuit, the plaintiff claims that the redemption card practice is a “contest which offers a chance at winning a thing of value.” The complaint goes on to point out that Federal and state law requires that any contest at winning something of value must be classified as No Purchase Necessary (NPN). When the company does not allow non-purchasers to enter the contest, it is deemed an unlawful lottery.
Now I want to make it clear that the complaints are not claiming that Topps and Panini are running an unlawful lottery. I read many articles that wrongly attribute this as a claim that the companies are running an illegal lottery.
The complaints go on to explain that the companies provide information about the contests being an NPN contest. However, the companies display the information in a deceptive way to consumers. The complaint claims that both companies failed to clearly and conspicuously display the information about the NPN. The information about the NPN contest is displayed on the packs inside the boxes of trading cards. The complaint then went on to connect this lack of clarity to consumer harm.
“By requiring purchase of the Product and rendering it difficult to impossible for nonpurchasers to obtain the redemption cards, consumers are misled to purchase items they otherwise would not have to, at higher prices.” The complaint went on, “Plaintiff believed and expected purchasing the Product was necessary to gain entry to the contest and gave the purchaser a greater chance at winning the contest because that is what the representations and omissions said and implied.” Finally, “Plaintiff would not have purchased the Product if she knew the representations and omissions were false, unlawful or misleading or would have paid less for it.”
Each complaint establishes two classes: residents of the jurisdiction (i.e. D.C. residents for the D.C. filing) and a consumer fraud multi-state class that includes 18 different states.
The complaint filed in D.C. establishes a cause of action under the Consumer Protection Procedures Act, D.C. Code Sec. 38-3901[DC Class Only]; Violation of State Consumer Fraud Acts [Multi-State Class Only]; Breaches of Express Warranty, Implied Warranty of Merchantability/Fitness for a Particular Purpose and Magnuson Moss Warranty Act, 15 U.S.C. §§ 2301, et seq.; and Unjust Enrichment.
The complaint filed in New York differs slightly as it establishes a cause of action under New York General Business Law (“GBL”) §§ 349 & 350; Violation of State Consumer Fraud Acts [Multi-State Class Only]; Breaches of Express Warranty, Implied Warranty of Merchantability/Fitness for a Particular Purpose and Magnuson Moss Warranty Act, 15 U.S.C. §§ 2301, et seq.; Unjust Enrichment’; Negligent Misrepresentation; and Fraud.
Both complaints are seeking a preliminary injunction along with monetary damages. These lawsuits have the ability to reshape the sports card industry as both Panini and Topps could face heavy damages. Topps and Panini sell cards in Walmart and Target as well as small mom-and-pop card shops across the United States. Topps and Panini have nationwide consumers that could cause the monetary damages from this suit to be very costly to both.
Justin Mader is a recent graduate of the University of New Hampshire Franklin Pierce School of Law where he earned a J.D. and a Sports and Entertainment Law Certificate. He can be reached via Twitter: @maderlaw and LinkedIn at https://www.linkedin.com/in/justin-mader-15a602119/.
